Rock Bottom Gambler Turned Entrepreneur Sells Wire Company for $465 Million
An interview with Rich Galgano, who overcame a gambling addiction at 23 and built a wire and cable company he sold in 2020.
Summary
Digital Asset News host interviews Rich Galgano, a lifelong entrepreneur who founded Windy City Wire in 1994 and sold it in 2020 for a reported $465 million. Galano describes hitting rock bottom as a compulsive gambler at age 23, losing everything to bookies and casino blackjack over a three-day bender in September 1993, before calling a gambling helpline and attending his first Gamblers Anonymous meeting. He credits the mentorship of older GA members, a timely $100,000 line of credit from a banker friend, and free warehouse space with giving him the foundation to launch his business. He also discusses surviving an early legal challenge from his former employer, achieving profitability every single month and year for 32 consecutive years, and his current activities running a family investment office alongside his children.
Key Takeaways
FULL TRANSCRIPT
Rich Galgano's Background and Introduction
Rich Galgano: I'm a lifelong entrepreneur since I've been 25 years old. I started a business called Windy City Wire in 1994, turned around and sold it in 2020. I'm still CEO of the company today, but I'm also involved in many other entities. I didn't become a successful entrepreneur until I stopped gambling.
I gambled at a young age — started high school poker games, college poker games. I won because I was playing against kids my own age and in my own mental capacity range. Since I had more money going into the poker games, I was able to bluff people out. I got this perception that I was smarter than everybody, when in essence they were probably smarter than I was. All I did was bluff my way to winnings. And winning — you get this sick feeling: "Oh, this is easy. I can win. I'm winning all the time."
So I graduated college, got a job, started making money. I had some negative things happen in my life at a young age, and I had more free time. I filled that free time by going to the Riverboat Casinos here in Illinois. I grew up in the Chicagoland area. So I started going to the Riverboat Casinos playing blackjack.
The Worst Thing That Can Happen to a Gambler
Host: What do you think is the worst thing that can happen to a gambler?
Rich Galgano: The worst thing that can happen to a gambler is to think that their losses aren't really as bad as they think they are and that they can keep going. You have this exuberance when you're actually gambling and you think you can just push through it.
Host: Because I lived in Las Vegas for a couple of years, and one of the weird things I would come across is talking to some of my friends. "Hey, how you doing, Pete?" "Doing pretty good. How was last weekend?" "I got up 10 or 20 grand. Pretty great." "So you're up?" "Oh, no, no, no. I mean, for the year I'm down, but I'm gonna come back and go even harder." I think that's one of the problems I saw with gamblers and my friends.
Rich Galgano: That's a great insight, but I will tell you the worst thing that can happen to a gambler is you win. Especially early in your career — if you want to call it a career. It would be much better to lose and realize you can't win and never gamble again, because you're sick about losing the money, sick about wasting the time, and sick about the way it makes you feel. So for me, I won. Win a thousand, win two thousand.
And by the way, this person in the background here — that's my daughter Janna. I'm starting a new business and I'm helping her get it off the ground. She's heard my story many times. My kids don't gamble. They're smart, unlike their dad.
So I started winning playing blackjack, and then you get this feeling that you can win. Then what started happening is I would play and I would start losing and I would get down. This is 1991, 1992. Five hundred bucks today is a lot of money — it was an astronomical sum of money back then. A thousand bucks. I would be down two thousand at the table, and then I'd have the comeback. And even if I broke even, I felt like I won for the night. You get this dopamine hit, this adrenaline.
The Descent into Compulsive Gambling
I started basically having two lives — working my ass off during the day selling wire and cable, and then gambling two or three nights a week. It became progressively worse, like any disease. It gets progressive. From blackjack, I got into high-stakes poker games. From the high-stakes poker games, I started betting with a bookie. My number was 601. I still remember it today. It was like my alter ego — 601, my Superman cape. Trips to Vegas. My first time on a plane, I was 21 years old. I went to Vegas. I'd never been anywhere on a plane before.
Three weeks before my 24th birthday, I went on a three-day bender — betting college football Friday night, college football Saturday, pro football Sunday. By the time the noon games were over Sunday, I'd blown my brains out. I was so deep in with the bookies. I'd lost everything, but more importantly, I'd lost my soul. The only time I prayed was when I prayed for a field goal, a touchdown, a win, a card.
By 2:45 in the afternoon on Sunday, September 13th, 1993, I was sick and tired of being sick and tired at the age of 23. I picked up the phone and called 1-800-GAMBLER. There was an angel on the other end of the line, and he said, "Get your ass to a Gamblers Anonymous meeting. There's one in Niles, Illinois," which was about 30 miles away from me. I got in my car, drove to Luan General Hospital, sat in that parking lot with two hands gripping that steering wheel, wondering if I was going to drag my ass into that meeting room. And I did. That Saturday, September 12th, was the last day I placed a bet.
The Power of Peer Support in Recovery
Host: You know what, there are a lot of people out there that will never go to that. They can't go to that. Just like you said — to go there and sit and grip that steering wheel, you don't want to go there. Especially when you know what the repercussions are. "I have to quit something that is my identity — 601. I don't want to do that." So for you to get all the way out there, that's the first step, which is great. Moving into the entrepreneurship — how did that go? You're a 23-year-old kid. How did you get from there to the next step?
Rich Galgano: I was 23 when I walked into my first Gamblers Anonymous meeting.
Host: To go from there — yeah. How'd you do that?
Rich Galgano: When you stop gambling, you get sponsors. Most of the guys in that meeting when I walked in were 40, 50, 60, 70-year-old men. There weren't many women in the program at the time. First thing you walk in, you see — what the heck am I doing here? These guys are old. I'm young. I don't have anything in common with them. But I decided to look at the similarities rather than the differences. I made friends with guys that were my father's age and older, and they became in a lot of ways my mentors. They encouraged me.
When you stop gambling — when you stop any addiction — your head clears up. I was not married. I was single at the time, and I was good at what I did. I said to myself, well, if there's any time to try to start a business, it's now. And that's what I did. Twenty-six years later, I sold it for an astronomical sum of money. It's been — I've been truly blessed.
Host: Lessons — it's the lessons right there. Warren Buffett talks about learning from mistakes, and they don't have to be your mistakes. When you talked about making friendships with those guys who were older than you at Gamblers Anonymous, I think it was a plethora of information that you couldn't really get anywhere else, and they're the only ones that are really going to understand you. That's a godsend. Because to talk to somebody — let's say you have another addiction, whatever it is — when you go talk to a registered professional, they can get you so far. But to have somebody who's already been there and is going through the process and actually beating it, those are the ones that say, "I know what you're going through. I know exactly what it is. You're going to feel this, this, and this. This is what helped me." It may not help you, but it can go that way.
Addiction as a Disease
Rich Galgano: Yeah. And listen, the gambling isn't the disease. Drinking is not the disease. Drug addiction — we're the disease. It just manifests itself in a different outlet. I don't care whether you're popping pills or flipping cards. You have the same deficiencies internally. I believe it's the dopamine, the chase. Beating yourself up at the casino table and then rallying back is an unbelievable feeling. Maybe that same feeling when you're a junkie getting that shot of heroin.
In the program, there were so many multi-addicted people. We used to joke around — if you were a gambler and a drunk, you had the daily double. If you were a gambler, drinker, and drug addict, you were a triple. If you were gambling, drinking, drugs, and a sex addict, you hit the grand slam. You would see guys quit gambling and then six months later they're in an AA meeting too. Guys were coming from AA into GA — they just stopped one addiction and picked up another one. It's interesting, that's for sure.
Host: It's interesting, and the dopamine hit makes a lot of sense, especially as we're talking about people who trade — especially short swing traders and scalpers. Same type of thing. You win a trade here, you win a trade there, and before you know it you're deep in: "Well, if I win all these trades, I could do a little leverage play." Before you know it, you're down that hole.
But Rich, as you were talking about this — you're a young guy, 23 years old. What's that next step to go from that, fight through it, and then become a pretty big success with your own business? Because it's not where you start, it's where you end up.
Building Windy City Wire from Scratch
Rich Galgano: You need a lot of things. Starting a business, obviously you need to have knowledge, you have to have skill, you have to understand the market. But you also need support. My support came from — I elected to go into business with a partner. A lot of businesses fail. Partnerships fail more often than they succeed, I believe, but I had a great partner. He had a friend who had a cousin who worked for a bank. The cousin knew Gary — that was my partner — liked Gary, and he was a young kid our age as well, 25, 26. He said, "Hey, I'm leaving the bank in six months. I'm going to get my master's degree. Guys, I can give you a $100,000 line of credit. No one's going to question me."
We needed capital. We didn't have any capital. So all of a sudden we have $100,000 to start the business. He had another friend who had a business that his father left him, and he had a bunch of warehouse space. "You can have free warehouse space." So we had free warehouse space, we had a $100,000 line of credit, and I knew how to run and operate a business because I had been doing it for four and a half, five years. I wasn't scared or intimidated. I knew we were going to be successful — we just needed that little edge. If we didn't have the money, we would have never been able to do it.
Especially since a week later we were in court with the possibility of getting a temporary restraining order placed on us from my old employer. Sure enough, we went to court and they got a TRO, and we had to spend an astronomical sum of money on legal fees to win that case. The most pivotal time in my business career were the first 60 days I was in business because of that lawsuit.
I've made money every single month I've been in business. I've made more money every single year for 32 consecutive years. That's rare. Nothing keeps me up at night now. But you go back to 1994 and the beginning of 1995 — yeah, I was kept up at night with that lawsuit.
Host: I believe it. I've been there too. When you're in business, it's inevitable. I think it was Mark Cuban that said if you're not going through some type of a lawsuit, maybe you're not doing something right. That's a tongue-in-cheek comment, but in some ways it's a little bit accurate.
Just to reiterate some things you talked about — you were in the right place at the right time, but you took advantage of those opportunities. I think the people watching this right now are coming out of a bear market. We've had a pretty brutal bear market where we were down roughly 51% from the all-time high over the last nine months. I believe everybody here is in the right place at the right time, and if they see the opportunity, they can take it. I can't give financial advice, but I can tell you what I'm doing, which is buying Bitcoin every single Monday, and as the price goes down, I buy more — I double, quadruple, and 8x the buys. Those types of opportunities are what really set you apart, just like what you did, Rich.
To finish this up — where are you at now with the business and everything else?
Life After the Sale: Family Office and Diversification
Rich Galgano: Well, since I sold the business, I've opened up a family investment office. My son has been working there for the last few years helping me out day-to-day. Our oldest daughter just came on — she's helping us get an exciting new business off the ground. We've got real estate, we've got stocks, we have bonds, we have private investments, we have all kinds of things going on. There's a lot to manage, and I still run the wire company on a day-to-day basis. I'm more busy at the age of 58 than I think most people in my position would be.
One of my buddies sold his business three or four months ago and he called me today and said he's looking at buying another business. I said, "What?" He goes, "I'm already bored."
Host: Yep. That's it.
Rich Galgano: He's going to — "I'm bored out of my mind."
Host: People look at guys like you and say, "You've made good money — why don't you just go sip mai tais on the beach?" I live in Puerto Rico. Do you have any idea how boring that is to do every single day?
Rich Galgano: There's a reason why we do what we do. But I think it's smart to have an allocation in Bitcoin, and it's smart to be diversified — gold, silver, Bitcoin, real estate, equities, private investments. A lot of people say the only way to become very wealthy is rolling it all on one thing. That's what I did — I built one business, put all my effort in, sold it, made a tremendous amount of money. Now I'm diversified because there is risk in only owning one asset.
Maybe things continue to go like this forever. I'm too dumb to know that answer, but I know most things don't go like this forever. Diversification is important. If I had anything to say to a young kid, it's: you better be careful with leverage. Leverage is a double-edged sword. It can make you, but it can break you faster than it can ever make you.
Host: That is the truth. And Rich, trust me, I've met some people — you're not a dumb guy. Everybody, Rich Galgano, thank you for coming on the show.
Rich Galgano: Nice meeting you, everyone. Take care.